China developer Country Garden sees 2022 loss amid property market slump (updated)

Sunac Services Holdings

13/03/2023 02:59

(Adds shares reaction, Sunac Services, other details)
       HONG KONG, March 13 (Reuters) - Top Chinese property
developer Country Garden Holdings  2007.HK  said on Monday it
expected to swing to a net loss of up to $1.1 billion for 2022
amid a sluggish property market, though core profit, excluding
nonrecurring items, would remain positive.
    The company, which has the largest sales in the industry,
said its loss was mainly due to a drop in gross profit margin, a
rise in provision for impairment for property projects, and net
foreign exchange losses it expected to report.
    The estimated loss attributable to shareholders, ranging
from 5.5 billion yuan to 7.5 billion yuan ($799 million to $1.09
billion) for 2022, compared with a 26.8 billion yuan profit in
2021, Country Garden said in a filing to the Hong Kong bourse.
    Core net profit is expected to be in the range of 1 billion
yuan to 3 billion yuan, compared with 26.9 billion yuan in 2021
as provision for impairment for property projects and foreign
exchange losses also hit results.
    "The board is of the view that the above factors which
affected profit are mainly in non-cash nature," said Country
Garden, adding its net debt ratio had long remained at a low
level and the company maintained a good credit record.
    Smaller developer Logan Group Co Ltd  3380.HK  also said it
expected to record a net loss of 7 billion yuan to 9 billion
yuan for 2022 amid project delays and a drop in income on the
back of the impact of COVID-19. 
    Sunac Services, the property management arm of major
developer Sunac China  1918.HK , said on Sunday it expected a
net loss of up to 500 million yuan due to significant increases
in the impairment provision for money due from related parties.
    Shares of Country Garden dropped as much as 5.5% in the
morning session, while Logan eased 4.2%. Sunac Services lost
3.7%. Their drops compared with a 1% fall in the Hang Seng
Mainland Properties Index  .HSMPI .
    ($1 = 6.8808 Chinese yuan renminbi)

 (Reporting by Donny Kwok; Editing by Kim Coghill and Bradley
Perrett)
 ((donny.kwok@thomsonreuters.com; +852 3462 7745;))